On August 26, Zhihu released its unaudited financial results for the second quarter of fiscal year 2026.

During the quarter, the company generated revenue of 690 million yuan, a year-over-year decline of approximately 4%, yet a sequential increase of 5.9% from the first quarter. Looking at the first half of the year, Zhihu maintained adjusted profitability. Revenue for the first six months of 2026 stood at approximately 1.342 billion yuan, down about 7% from 1.447 billion yuan in the same period last year; adjusted net profit was 6.906 million yuan, significantly lower than the 98.28 million yuan recorded in the prior year.

The improved second-quarter revenue primarily stemmed from paid content and IP operations. This segment brought in 426 million yuan in revenue, up roughly 4% year-over-year and accounting for over 60% of total revenue; marketing services revenue was 199 million yuan, down about 11% year-over-year; other revenue totaled 65.2 million yuan, a decline of approximately 24%, which the company attributes mainly to adjustments in its vocational training business.

Notably, average monthly subscribed members in the second quarter reached 13.1 million, compared with 13.2 million in the same period last year and roughly flat with the first quarter of this year. Consequently, growth in paid content and IP operations revenue came more from IP operations than from an increase in subscriber numbers.

Since the first quarter of this year, Zhihu has consolidated its previously separate paid membership revenue with IP operations revenue, which was formerly included under other income—the latter mainly comprising copyright licensing and content distribution.

This shift aligns with Zhihu's AI investment direction this year. During the first-quarter earnings call, management indicated that AI is being applied to IP development processes, including short dramas and animated series, covering storyboarding, image generation, scriptwriting, and distribution, to enhance content adaptation efficiency.

The year-over-year growth in second-quarter IP operations revenue suggests this approach has begun contributing to revenue; however, the company has not separately disclosed the revenue scale generated by AI-produced content, making it difficult to assess its actual impact on the overall business.

Another AI commercialization path involves data services for large model vendors. Zhihu launched its expert data solutions this year, leveraging the platform's professional creators and content accumulation to provide data services for model training, evaluation, and other stages.

The company disclosed that in the first half of the year, projects were completed in areas such as coding, search and deep research, visual reasoning, and intelligent agents; in the second quarter, the related business initially established a workflow from understanding client needs to scaled delivery. Zhihu's current open data platform also offers interfaces such as Zhihu search, web-wide search, APIs, and MCP.

However, this business remains in its early stages. Zhihu has not separately disclosed revenue from expert data solutions, instead including it under "other income," which also covers vocational training and other activities.

Management has defined new businesses, including AI, as being in the "commercialization validation phase," with future resource allocation to be determined by market demand, customer value, and return on investment.

Pressure on profitability comes from two fronts: gross margin and non-operating gains. In the second quarter, Zhihu's gross margin was 57.0%, down 5.5 percentage points from the same period last year, primarily due to increased content-related costs; operating costs rose from 269 million yuan to 297 million yuan during the period. Meanwhile, investment income fell from 141 million yuan a year ago to 16.4 million yuan, a key factor in the swing to a GAAP net loss.

At the same time, expense control continued. Second-quarter operating expenses declined 13% year-over-year to 469 million yuan, with R&D expenses down approximately 25% to 109 million yuan and sales and marketing expenses down about 5%. Operating loss narrowed from 91 million yuan in the same period last year to 75.9 million yuan. As of the end of June, the company held approximately 4.424 billion yuan in cash and cash equivalents, time deposits, restricted funds, and short-term investments.

For Zhihu, the current operational priority extends beyond further cost reduction to finding new growth drivers while revenue stabilizes again. Second-quarter revenue improved sequentially for a consecutive period, and IP operations began to grow; however, the decline in gross margin and a return to adjusted losses on a quarterly basis indicate that the profitability foundation still needs strengthening.

Whether expert data services can generate sustainable, scalable revenue, and whether AI's efficiency gains in content IP development ultimately translate into profit improvements, will be key metrics to watch in the coming quarters.